With the war for top talent in full swing, companies need to start thinking about more creative ways to get and keep employees. One of the best, in my opinion, is variously called virtual employees, remote employees, and distributed development. If the world’s best Backbone.js developer lives on a compound in Montana, then instead of losing out on the opportunity, hire her wherever she is and let her stay there.

Zendesk COO and Friend of RedMonk Zack Urlocker gave an instantly classic talk on distributed development at our last two conferences, the Monktoberfest in Portland, ME, and Monki Gras in London. (Shameless plug: Monktoberfest tickets go on sale Friday!)

RedMonk’s mentioned distributeddevelopmentafewtimes over the years, but without really going into the benefits from both employer and employee points of view. Zack does a great job talking about how to make a distributed company work, in addition to tons of examples of companies that have made it work, so I won’t focus on those — watch the video if you’re interested. I’ve seen how well it works at both Gentoo and more recently at RedMonk, and in fact open-source software would not exist in its present form without it.

Instead, I’m going to talk about the benefits to both employers and employees when you do this. For companies, here are some of the wins you get out of using distributed development:

You can get the best talent without fighting with Google and Facebook. There are a vast number of reasons people might be geographically tied down, whether it’s social networks, sick family, nearby family and friends, spouse’s jobs, cost or quality of living, or simple enjoying the city and the lifestyle. If they’re based outside the Bay Area and Seattle, in particular, then you’ve skipped the homes of the biggest tech giants.

You’re optimized for open-source participation. I’ve talked previously about bringing OSS development models to companies, but it goes both ways. For companies that are increasing their involvement in open-source communities, there’s a huge amount of value in already working the same way that those communities do. And vice versa; when hiring open-source contributors, they can fit very easily and seamlessly into companies that work the same way they do.

Your employees are happier and thus more productive in the long term. Everyone’s got an optimal working environment, and for some people, it’s on the couch in their pajamas with a bag of chips. Giving them the flexibility to work however they want to work in a results-only work environment (ROWE, for HR geeks like me) means they’re focused on getting the job done, not on punching the clock to meet some meaningless number like face time.

Your corporate reputation improves among your target employees. When word starts to get around that you’re a great company to work for (and it will), you start a virtuous cycle of continually getting better and better employees. The top employees will only look for new jobs maybe four times in their entire lives, and you won’t find them on Monster. But what you will get is those 100x developers that you’ve been dying for.

For employees, here’s what you get with distributed development:

The lifestyle you want, not the one your company wants. If you’ve got a family, or even if you don’t, how many times have you missed something important because it fell during standard work hours? With a flexible schedule, you can make up effort wherever necessary. With the increase in technology in our daily lives, a work-life balance can easily become “How can work take over your life?” rather than “How can work and life integrate with each other both ways?”

No more wasted commute time. Spending an hour or more each way in a car, bus, or train sucks. Wouldn’t you rather have fun with that time, or spend it with people special to you?

Whatever environment is optimal for you to Get Stuff Done. Whether it’s sitting on the couch with a cat on your lap or hunkered down in the basement with headphones, you can do whatever’s necessary to be at your most productive. After all, if you’re in a results-only work environment (ROWE), it doesn’t mean you can only work more than 40 hours a week; if you get your job done, you could also work less than 40. Even if you’re extroverted, you can likely take advantage of a local coworking space to spend time with others, trade ideas, and get stimulated.

Whether you’re an employer or employee, if you aren’t working distributed, you’re missing out.

Disclosure: Zendesk is not a client but has supported RedMonk events. Google and Facebook aren’t clients.